Cable Technology Feature Article

Paramount Loses Dreamworks Distribution Deal to Fox

Dreamworks has left Paramount and has moved to Fox, signing a new five-year distribution deal in the process.

The move means that Paramount has lost the source of the only hit movie they’ve had so far year, which was “Madagascar 3.”

According to reports, Dreamworks Animation CEO Jeffrey Katzenburg had promised shareholders that he would find a new distribution deal by Labor Day. The final two candidates were Fox and Sony.

Fox, which already has a major animated hit in “Ice Age,” now owns Dreamworks and Blue Sky, the second and third most profitable animation studios. Franchises from Dreamworks include “Shrek,” “Kung Fu Panda” and “How to Train Your Panda.” Blue Sky produced the hit “Rio” and the upcoming film “Epic.”

The leading animation studio is Pixar, which has earned $408 million from its summer release “Brave.” Universal also had a hit this year with “The Lorax,” which has grossed $335 million so far.

Additionally, Paramount has only released six movies this year, including “Madagascar 3.” Warner Bros., by comparison, has already released 11.

The good news for Paramount is that 2013 looks promising. Films like “World War Z,” “Anchorman 2” and J.J. Abrams’ “Star Trek” sequel all promise to be big cash cows for Paramount.

Also, the company has seven more releases slated for 2012, including Denzel Washington’s “Flight,” Dreamworks’ holiday film “Rise of the Guardians,” “Paranormal Activity 4,” and Tom Cruise’s “Jack Reacher.”

Paramount may hit the $1 billion mark yet. Even if they don’t, the future continues to look bright, even without the backing of Dreamworks.

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